Obama’s Right Direction Exposed

I was looking over the Consumer Metrics Institute’s New Growth Index and some of their other charts (here) and almost fell out of my chair. While every left-wing pundit, Obama, and his inept administration are boldly declaring that we are headed in the right direction, the facts beg to differ.

Who should I believe, the facts or the White House?

Their Conclusion: “As such, the prospect of a double-dip recession, something that’s happened only once since the Great Depression, remains a distinct possibility. That earlier double dip was a 6-month recession from January 1980 to July 1980, a 12-month recovery, and a 16-month of recession from July 1981 to November 1982. The one bit of good news for that earlier period is that the second dip coincided with the end of a secular bear market and the beginning of an 18-year cycle of accelerating growth.”

“The charts below focus on the ‘Trailing Quarter’ Growth Index, which is computed as a 91-day moving average for the year-over-year growth/contraction of the Weighted Composite Index, an index that tracks near real-time consumer behavior in a wide range of consumption categories. The Growth Index is a calculated metric that smooths the volatility and gives a better sense of expansions and contractions in consumption.”

“The 91-day period is useful for comparison with key quarterly metrics such as GDP. Since the consumer accounts for over two-thirds of the US economy, one would expect that a well-crafted index of consumer behavior would serve as a leading indicator. As the chart suggests, during the five-year history of the index, it has generally lived up to that expectation. Actually, the chart understates the degree to which the Growth Index leads GDP. Why? Because the advance estimates for GDP are released a month after the end of the quarter in question, so the Growth Index lead time has been substantial.”